PREMALATHA PAPPU RAJA Vs. SHRIRAM TRANSPORT FINANCE LTD

JUDGEMENT

(1.) AGGRIEVED by the order of the learned single Judge dated 21. 12. 2005 in Application No. 3847 of 2001 in C. S. No. 231 of 1998, permitting the Advocate Commissioner for sale of item No. 2 (Plant and machineries) in the schedule, respondents 4 to 6 therein filed the above Original Side appeal.

(2.) M/s. Shriram Transport Finance Limited and M/s Shriram Investments Limited have filed c. S. No. 231 of 1998 against N. A. P. Alagiri Raja and Co. , and five others praying for an order directing the defendants to pay a sum of Rs. 1,31,52,250/- with interest at 21% per annum with monthly rests on Rs. 19,00,000/- along with costs and in default, to sell the schedule mentioned property and settle the proceeds towards the payment of the amount of the said principal, interest and costs.

(3.) PENDING the suit, the plaintiffs also filed Application No. 3847 of 2001 for an order of sale of the properties mentioned in the Schedule to the Judge's Summons and for deposit of the amount to the credit of C. S. No. 231 of 1998. In the affidavit filed in support of the above application, it is stated that the first respondent, viz. , N. A. P. Alagiri Raja and Co. , and five partners borrowed a sum from the applicants by hypothecating the plant and machineries of Palani Sri murugan Textiles Limited and deposited the title deeds of the property, in which the mill at palani is situated. The respondents could not run the mill efficiently and there were huge arrears in respect of the principal and interest due by them. The respondents also mortgaged, by deposit of title deeds, their personal properties situated at Rajapalayam, Mettupatti since the mill at Palani was not running and was heavily indebted to various creditors and due to the respondents creating further charge to defeat the rights of the applicants, the applicants took out O. A. No. 908/1998 for appointment of an Advocate Receiver to take charge of the properties. By an order dated 07. 07. 1999, the original side of this Court had appointed Shri. R. Sridharan, advocate, Dindigul, as Advocate Commissioner to inspect the machineries installed in the mill and also to take steps for upkeep and maintenance of the machineries. The Advocate commissioner, after inspection, submitted a report stating that machineries are rusting as they have not been put to any use for a long time and if they are not used and maintained further, the value of the security available to the applicants will diminish considerably. On the other hand, if the mill's properties are sold in "as is where is" condition immediately, the applicants would be able to secure a good offer and thereby reduce the liability of the respondents to that extent. It was suggested that it would be in the best interest of the applicants and the respondents to take immediate steps to sell the mill and the properties described in the schedule to the Judge's summons. On verification, the applicants came to know that the highest offer was made for a sum of Rs. 80 lakhs by one Karuppasami, Proprietor, Uma Tex, Palani. It would be in the best interest of both the parties that the said offer be accepted and the amounts realised after the sale may be deposited to the credit of the Suit. With these particulars, the applicants prayed for an order for sale of the properties mentioned in the schedule to the Judge's Summons to M. Karuppusami, Proprietor, Uma Tex, Palani for a sum of Rs. 80 lakhs and deposit the said amount to the credit of the suit in C. S. No. 231 of 1998.